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CITY COUNCIL DRAFT <br />2. PROMISE TO PAY. For value received, Borrower promises to pay to the City, at its <br />office at 20 Civic Center Plaza (M-30), Santa Ana, CA 92702, or at such other place as the <br />Lender hereof may from time to time designate in writing, the Principal Amount together with <br />interest thereon, and all other sums due under and secured by the Deed of Trust. <br />3. SECURITY. This Note is secured by the City Deed of Trust. The holder of this Note will <br />be entitled to the benefits of the security provided by the City Deed of Trust and will have the <br />right to enforce the covenants and agreements of Maker contained therein and in the Affordable <br />Housing Resale Restrictions <br />4. PAYMENTS. The City Equity Share is due upon a Transfer of the Property after <br />expiration of the Affordability Term, or upon an event of Default. In the event any City Equity <br />Share become due and payable hereunder or pursuant to the Affordable Housing Resale <br />Restrictions, the City Equity Share shall be immediately due and payable hereunder. Failure to <br />declare such amounts due in any instance shall not constitute a waiver on the part of the City to <br />declare them due in the future. Maker will pay to City all sums owing under this Note without <br />deduction, offset, or counterclaim of any kind. <br />5. DEFAULT RATE OF INTEREST. If City Equity Share payable to City pursuant to the <br />Affordable Housing Resale Restrictions and this Note are not paid to City within ten (10) days of <br />the due date thereof, then interest shall accrue on such sum at a rate equal to the lesser of eight <br />percent (8%) interest per annum, compounded annually, or the maximum rate permitted by law. <br />6. PREPAYMENT. This Note may not be prepaid in whole or in part. <br />7. TRANSFER. Maker shall not transfer, lease, sell, assign, refinance, encumber, convey or <br />otherwise Transfer any interest in the Property without complying with all requirements of the <br />Affordable Housing Resale Restrictions. Maker's failure to comply with the requirements of this <br />paragraph shall be a Default under this Note. <br />DEFAULT. The occurrence of any one or more of the following shall constitute an event <br />of default ("Default") hereunder. <br />8.1 The occurrence of a breach of any of Maker's covenants, warranties, or <br />representations under this Note, the City Deed of Trust, or the Affordable Housing Resale <br />Restrictions, including without limitation, any unauthorized refinancing, sale, conveyance, lease, <br />assignment, encumbrance, or other Transfer of the Property, Maker's failure to occupy the <br />Property as Maker's principal residence, any failure to pay amounts payable pursuant to this <br />Note, and Maker's failure to maintain insurance on the Property as required pursuant to the City <br />Deed of Trust. <br />8.2 The entry of an order for relief under federal bankruptcy laws as to Maker or the <br />adjudication of Maker as insolvent or bankrupt pursuant to the provisions of any state or federal <br />Page 45 <br />Exhibit C <br />5 53 94.0010 1 \43721567.2 <br />